Ryan pal gets 1 year, 1 day

Rudolph Bush, Tribune staff reporterCHICAGO TRIBUNE

Attorney and developer Peter Palivos was sentenced Thursday to a year and a day in prison and fined $40,000 despite his insistence he was framed because he wouldn't cooperate in the investigation of former Gov. George Ryan.

U.S. District Judge Joan Humphrey Lefkow ruled that Palivos' protests of innocence and his allegations of misconduct by federal prosecutors and agents were not convincing and inconsistent with the evidence in the case.

She at once lauded Palivos' many charitable works and compelling life story as a self-made man but also wondered if he could distinguish "what is true and what is not true."

The only other possibility is "that you can stand before me and say you are telling the truth, and I can't believe it," she said.

Palivos, 47, was convicted in 2003 of conspiring to obstruct a federal investigation into the 1996 sale of the Waterfalls Restaurant in Antioch.

Prosecutors charged that the sellers of the restaurant, including Palivos' brother George Palivos, secretly financed the sale to buyer Peter Bouzanis.

Bouzanis used the seller's secret backing to fraudulently obtain a loan that was partially guaranteed by the U.S. Small Business Administration, prosecutors charged.

Palivos' obstruction came four years later, when he encouraged attorney Nicholas Black to forge two backdated notes that would create the appearance of contract negotiations between the sellers and buyer, according to the charges.

Black pleaded guilty in 2002 and was the primary witness against Palivos. He has stood behind his testimony but has also said he feels he was misled about forensic evidence relating to the notes.

Bouzanis and George Palivos are fugitives living in Greece and have never answered the charges, prosecutors said.

Louis Marin, who was charged with filing a false tax form in the conspiracy, was sentenced Thursday to six months of home confinement.

In an unusual decision, Peter Palivos continued to maintain his innocence before Lefkow Thursday. Defendants who accept even nominal responsibility for their crimes often receive some leniency.

But Palivos said he owed it to himself and his family to continue fighting.

"Why would I jeopardize my freedom, my liberty, my law license and my family for two notes that meant nothing to me?" he asked.

Outside court, Palivos reiterated a long-standing charge that he was framed after he declined to help prosecutors convict Ryan.

Ryan is on trial in federal court for allegedly using his elected offices to enrich his friends and himself by cutting them in on government contracts and leases. When Ryan was secretary of state, Palivos, a personal friend and financial backer, leased the office a property at 36 W. Randolph St.

"They wanted to frame me to get me to become a witness against George Ryan, but I have nothing incriminating to say against the man," he said.

Palivos has exhaustively pursued charges against prosecutors and federal agents in several forums and has been rebuffed on all fronts. An internal inquiry in the U.S. attorney's office and Lefkow's own rulings have found the charges are without merit.

Assistant U.S. Atty. Marsha McClellan said in court Thursday that Palivos' charges are the protests of a man who doesn't want his private misdeeds to tarnish a polished public image.

She concluded that while Palivos gives money freely to charity, he only paid off a backlog of child support to a former mistress in anticipation of his sentencing.

"How do you possibly reconcile the charitable contributions to the starving children in Africa when you don't even pay to feed your own child in this city?" she asked.

Palivos acknowledged that he is a deeply flawed man but spent much of his own statement to the court recounting a list of good deeds, including taking in a man off the street who has become a minister.

"I don't know how to lie. I tell the truth at all times," he said.

Lefkow ruled that Palivos could remain free through appeal despite prosecutors' protests over fears he might flee to Greece.